Chen Company produces a product in a two-department process, Assembly and Finishing. The following information is available on their first department, Assembly: Beginning Work-in-process -0- Units started 200,000 Units completed and transferred to Finishing 168,000 Ending Work-in-process 32,000 Direct Material Added $700,000 Direct Labor 960,000 Factory Overhead 480,000 Total cost to account for 2,140,000 The units still in process are 100% complete with respect to direct materials and 75% complete with respect to conversion costs. Required: 1. The total cost of ending work-in-process is:
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Chen Company produces a product in a two-department process, Assembly and Finishing. The following information is available on their first department, Assembly:
Beginning Work-in-process -0-
Units started 200,000
Units completed and transferred to Finishing 168,000
Ending Work-in-process 32,000
Direct Material Added $700,000
Direct Labor 960,000
Factory Overhead 480,000
Total cost to account for 2,140,000
The units still in process are 100% complete with respect to direct materials and 75% complete with respect to conversion costs.
Required:
1. The total cost of ending work-in-process is:
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